Shkreli Fails to Avoid Trade Secret Suit Over Wu-Tang Clan Album

Convicted fund manager Martin Shkreli must face trade secret and other claims over his alleged unauthorized copying and distribution of the one-of-a-kind Wu-Tang Clan album, “Once Upon a Time in Shaolin.”

PleasrDAO, a collective of investors who purchased the musical work for $4 million in 2024, can proceed with claims under the Defend Trade Secrets Act because it plausibly alleged the “unique facts” of the album, including its secrecy, are distinct from typical records, Judge Pamela K. Chen of the US District Court for the Eastern District of New York wrote in a Thursday order partially denying Shkreli’s bid to toss the suit.

Shkreli bought the album for $2 million in 2015. He was sentenced to seven years in prison for securities fraud in 2018, and the court ordered him at the time to forfeit assets including the album.

PleasrDAO sued Shkreli last year, alleging that after he was released from prison in 2022, he publicly stated online that he still has a copy of the album and has shared it with thousands of people.

Nothing in the complaint suggests the album’s contents “were known by anyone outside of those in the chain of ownership,” and that secrecy is a large part of the album’s intrinsic value. The economic value of the work also comes from PleasrDAO’s ability to use that exclusivity to “create an ‘experience’ that its competitors cannot,” the judge said.

PleasrDAO’s claim to recover the sole physical copy of the album is also “qualitatively different” from a copyright infringement claim, and therefore isn’t preempted by the Copyright Act. Although it has nothing to do with Shkreli’s alleged unauthorized use of the album, PleasrDAO’s allegation that it “has an exclusive right” to the album is enough to survive dismissal, Chen wrote.

Chen dismissed the organization’s tortious interference and unjust enrichment claims are preempted by the Copyright Act.

Although “at least part of” PleasrDAO’s tortious interference claim is distinct from a traditional copyright infringement claim, it’s not sufficient to “change the underlying nature of the claim,” which is based on Shkreli’s alleged unauthorized use of the album. The unjust enrichment claim fails for similar reasons, since it’s also premised on Shkreli’s alleged retention and distribution of the album, the judge said.

Reed Smith LLP represents PleasrDAO. Taylor Dykema PLLC and Bochner PLLC represent Shkreli.

The case is PleasrDAO v. Shkreli, E.D.N.Y., No. 1:24-cv-04126, 9/25/25.